The Housing Bubble

“”It’s a lethal mix,” Zandi said.

(AP) Since 2006, nearly 5 million homes have been lost to foreclosures or other distressed sales, according to Mark Zandi, chief economist at Moody’s Analytics. Zandi expects 3 million more to hit the market over the next two years.

Zandi noted that 15 million homeowners still owe more than their homes are worth. And 26 million Americans are either unemployed or underemployed. The underemployed include people who have given up looking for work and part-timers who would prefer to be working full time.

~ Despite all the money the federal government has poured into the real estate market in an effort to jump start it, prices are declining. In the first quarter of 2010, U.S. home prices fell 3.2 percent compared with the fourth quarter.

AMERICA’S NATIONAL DEBT
TOPS $13,000,000,000,000;
DEBT PER TAXPAYER - $117,975;
US DEBT TO GDP RATIO - 90.3%

Poll Finds Americans Pessimistic, Dissatisfied with Washington ~CBS News

Americans are frustrated with nearly everyone in Washington - including President Obama, Congress, and the Democratic and Republican parties - and have become increasingly pessimistic about what the future holds, according to a new CBS News poll.

Seven in ten Americans are dissatisfied with the way things are going in Washington, including 22 percent who say they are “angry” about the situation. Just 15 percent overall approve of the job being done by Congress.

Opinions of both parties, meanwhile, are at or near historic lows: 55 percent of those surveyed hold unfavorable views of Republicans, and 54 percent hold unfavorable views of Democrats.

The president’s job approval rating has fallen to 47 percent, and, perhaps more crucially, Americans no longer say he shares their priorities for the country.

Orlando visitor traffic down 5%

Good thing the town does not depend on tourist dollars.

http://www.orlandosentinel.com/business/os-orlando-attendance-20100525,0,7215956.story

Cousteau Jr.: ‘This Is a Nightmare… a Nightmare’ - ABC News
Philippe Cousteau Jr. and Sam Champion take hazmat dive into Gulf’s oily waters.

http://news.yahoo.com/video/us-15749625/cousteau-jr-this-is-a-nightmare-a-nightmare-20009724

Durables Orders in U.S. Increased More Than Forecast (Update1)

(Bloomberg) — Orders for durable goods rose in April for the fourth time in five months, pointing to strength in U.S. manufacturing at the start of the second quarter.

The 2.9 percent increase in bookings for goods meant to last at least three years was the biggest in three months and followed little change in March, figures from the Commerce Department showed today in Washington. Orders excluding transportation unexpectedly fell after revisions showed even bigger increases in prior months.

Rising exports and lean inventories are prompting companies to place more orders with factories, keeping factories at the forefront of the recovery from the worst recession since the 1930s.

CBO says stimulus kept unemployment rate lower.
Washington Times

The stimulus law was responsible for funding between 1.2 million and 2.8 million jobs in the first quarter of this year and kept the unemployment rate lower than it would otherwise have been, the Congressional Budget Office said in a new analysis Tuesday.

The analysis said the gross domestic product, the measure of the country’s economy, was between 1.7 and 4.2 percent higher than it would otherwise have been without the $862 billion program, which passed Congress in February 2009 almost exclusively on the strength of Democratic votes.

As for unemployment, even though the rate hovered around 10 percent during the quarter, CBO said that could have been as high as 11.5 percent without the stimulus.

CBO said the stimulus’s effects will peak this year and then shrink next year, and fade away by the end of 2012.

Big bankers interests, fancy lawyers and big money decisions visit Johnny Depp’s small town “Public Enemies” movie Courthouse and the cows.

Darlington, Wisconsin is a wonderful, picturesque small farm town but really out in the middle of nowhere and out of the way would be a major understatement.

Business
Ambac to pay banks $2.6 billion
Lawyers pack small-town courtroom
By Cary Spivak of the Journal Sentinel

Posted: May 25, 2010 |(1) Comments

Darlington — A deal to pay 14 of the world’s largest banks $2.6 billion as part of the restructuring of Ambac Assurance Corp. was approved Tuesday by a Lafayette County circuit court judge.

The deal - the first in what will be a long and complicated case - will provide the banks about $2.6 billion in cash and $2.6 billion in debt. Ambac owes the banks a total of $12.9 billion.

The deal was brokered by state Insurance Commissioner Sean Dilweg, who is controlling about $67 billion in troubled insurance policies issued by Ambac, a company that created the business of insuring municipal bonds but in recent years branched out to the high-risk world of insuring bonds backed by subprime loans.

After a 3½-hour hearing in a humid courtroom packed with 50 lawyers from across the country, Circuit Judge William D. Johnston ruled in favor of Dilweg and Ambac and against bondholders who objected to the deal. Objections were raised by bondholders who owned securities backed by subprime loans and by bondholders who financed the construction of a monorail in Las Vegas, a project now in Chapter 11 bankruptcy…

Johnston’s ruling allows payments to banks including Citibank, The Royal Bank of Scotland, Barclays Bank and Banco Bilbao Vizcaya Argentaria, a Spanish banking conglomerate…

When Dilweg took control of Ambac’s troubled assets, the move was meant to deal with the company’s high-risk policies while keeping separate - and protecting - its much safer lines of business, including its insuring of conservative and highly rated municipal bonds, valued at about $285 billion.

Though the company’s headquarters are in New York, the case is being heard in Wisconsin because Ambac - a spinoff of what is now MGIC Investment Corp. - remains domiciled in this state. It is regulated by the state Office of the Commissioner of Insurance.

Johnston is the go-to judge for Wisconsin insurance delinquency cases, and his rulings in the 103-year-old courthouse have far-reaching consequences…

“I saw all of the Armani suits, so I knew something was up,” cracked one Lafayette County sheriff’s deputy.

When courthouse maintenance man Thomas VanMatre heard about the pricey lawyers about to arrive, he knew just what to do.

“That’s why I’m changing the light bulbs” in the dome of the courthouse rotunda, he said…”

The locals have a sense of dry humor and the lazy Pecatonica river and big money decisions just keeps gently flowing… on past the Darlington Bridge.

http://tinyurl.com/3xq52oc

New $3B foreclosure prevention program added to Wall Street reform bill

According to a report in the Housing Wire the Senate has passed the Restoring American Financial Stability Act, approving a new program that would reduce mortgage payments for the unemployed.

The program would provide $3bn from the Troubled Asset Relief Program (TARP) to lend up to $50,000 to unemployed homeowners, who could reasonably resume making payments again within two years. The program was modeled after the Homeowners’ Emergency Mortgage Assistance Program (HEMAP) in Pennsylvania.

The Senate passed the bill last week but transplanted its own language into the one passed by the House of Representatives. The status of the reform is still “resolving differences.” But, lawmakers hope to have it in front of President Obama to sign by the July 4, 2010 recess.

Experts say the housing market is weak, with sales pumped up by government subsidies and unusually low interest rates.

http://www.msnbc.msn.com/id/37340069/ns/business-real_estate/

“The correction is definitely not over,” said Benjamin D. Clark, a Salt Lake City broker and president of the National Association of Exclusive Buyer Agents.”

That’s what we’ve needed — a buyers’ shill to counteract the propaganda of the sellers’ shills.

Council mulls foreclosure sale program
BATAVIA, NY

Councilman Tim Buckley proposed an idea to take foreclosed properties and sell them at a minimal price to city employees. Based on a successful program in Rochester, the idea is to take properties that might otherwise get bought by future landlords and instead turn them into single family homes.

“This would allow a young person to get started with housing,” Buckley said. “It would give them an opportunity to get some equity, and to get a loan.”

He said as a young patrolman for the city police department, he would have appreciated a chance to buy his own place.

Councilwoman Patti Pacino, while looking perplexed, asked why it would have to just be for city employees. She was under the impression, she said, that the city was trying to entice new residents to move in.

“It would be nice to have people to move into a house, whether it’s city employees or our own children,” she said.

Why not open it up to all citizens, Councilwoman Rose Mary Christian said. It’s a great idea, she said.

“But, I would be totally against it just for city employees,” she said. “There are other people out there too. I would rather offer it to the community.”

Councilman Sam Barone agreed, adding that “you need to be a little bit more open to all citizens.”

Christian asked for starting salaries of city fire and police personnel. No one had that information, but it is to be provided at a future meeting.

Some council asked why she wanted those details and she said that since Buckley referred to helping out folks in the fire and police department, she would like to know what they earned.

A ground breaking study by the Federal Reserve

Study: Poor math skills more likely to lead to foreclosure

MADISON (WKOW) — New research suggests it’s more important than ever to pay attention in algebra class.

A new study by the Federal Reserve Bank of Atlanta suggests homeowners with poor math skills are much more likely to lose their homes to foreclosure than homeowners with strong math skills.

According to the research paper and reporting by The Economist, 20% of homeowners with the worst math skills went into foreclosure, compared to 5% of homeowners with the best math skills.

Researchers used math quizzes and tests to determine skills.

The study also found that borrowers with the worst math skills are behind on their home payments 25% of the time. Homeowners who scored best on the math quizzes are behind about 10% of the time.

“This is a market purely on life support, sustained by the federal government,” he said at the Mortgage Bankers Association conference. “Having FHA do this much volume is a sign of a very sick system.”
http://www.businessweek.com/news/2010-05-24/fha-home-financing-volume-sign-of-very-sick-system-update2-.html

Addressing a Bank of Japan conference in Tokyo, Bernanke warned that any curbs on central bankers’ ability to execute monetary policy would lead to economic instability and “undesirable boom-bust cycles”.

???? and this is different from what we have now???

Funny how so many non ‘experts’ knew the spring fling was only temporary, with so many grabbing the 8k.

Experts see underlying weakness in housing.

Spring sales propped up by expiring tax incentive, low mortgage rates
msnbc.com

The housing market had a spring fling with buyers hoping to find bargains using the now-expired government tax credits and record low interest rates.

Now it’s back to reality.

The sweet sales pace of March and April, many experts agree, will sour by mid-summer, and the national housing downturn has not yet ebbed.

No problem, just raise taxes, since a state can’t print money. Perhaps it’s time for every state to get it’s very own patented federal reserve printing press.

DiNapoli says NY racking up more debt
The Business Review (Albany)

New York state is on the brink of racking up more unsustainable debt, state Comptroller Thomas DiNapoli warned on Tuesday.

DiNapoli studied three proposals for borrowing floated this year by Lt. Gov. Richard Ravitch and Democrats in the Senate and Assembly. He didn’t like what he saw: annual principal and interest payments of between $725 million to $850 million—or more.

The proposed borrowing would be used to cover operating expenses and help close the state’s $9.2 billion deficit.

“When you borrow to close budget gaps, there’s nothing to show for it but the billions taxpayers pay out each year—no roads, no schools, no bridges,” DiNapoli said. “It’s time to put aside borrowing proposals and move forward with a budget that recognizes New York’s fiscal reality. Every day of delay is just more wasted time.”

The Wall Street Journal also detects a whiff of deflation:

Meanwhile, the fundamental trend in the West remains profoundly deflationary. Last week the U.S. government reported that the country’s core consumer price index (CPI) inflation rate slid in April to its lowest level in 44 years.

It is also the case that, if the U.S. headline CPI remains flat from May onwards, the year-on-year headline CPI inflation rate will then fall to 1.4% in June and zero by January from 2.2% in April. This trend will reawaken deflationary concerns prompting Federal Reserve Chairman Ben Bernanke to keep interest rates at zero.

I was thinking yesterday about the oil spill in the gulf and I came to a small epiphany:

Is there anyone here who could not have effectively closed that well off within the first week with about $10 million? (think sand and gravel)

BP needs to be nailed to the wall on this, hunted to the ends of the earth. They spent the first month trying to conserve the well for future use, and for that they should pay.

Gold at $36,000 Not as Ridiculous as It Sounds? ~ CNBC.com

Gold has reached record highs in recent weeks, but it will continue to rise, Ben Davies, CEO of Hinde Capital told CNBC Wednesday.

Gold should be viewed not as a commodity, but as a cash supplement, Davies said.

“There’s been such proliferation of currency,” he said. “As a consequence, gold is very undervalued.”

“I could be really obtuse and say $36, 000,” he said. “But actually it’s not as ridiculous as it might sound.”

If all the reported Fort Knox gold was re-valued at $36,000 per ounce, it would pay off all the debt in the US, he said.

On Monday, Dennis Gartman reversed his call for gold investors to rush to the exits, saying the precious metal was no longer overbought, but also warned that it was a technical call and he is “not a gold bug.”

Davies argued that as the money supply increases, gold will see an increase in use as currency, boosting demand. Emerging markets will also buy gold to increase reserves, he added.

Great dynasties in history have come out of crises with large amounts of gold to use in the markets to buy cheap assets, Davies said.

Inflation vs. Deflation

http://dshort.com/charts/guest/TLT-DBB-100526.gif

This chart tells the tale.
It shows base metals versus T-bonds.

According to the chart, now would be a good time to buy base metals and sell treasuries……unless of course the historical trend is broken (i.e. bond prices continue to sky rocket, and base metal prices drop further)
one to watch!

From the Editors of American Banker
Questioning Libor as a Peg for Loans in the U.S.
Europe woes revive doubts about index’s accuracy

In the past few weeks, Libor – the influential composite of short-term borrowing costs for some of the world’s largest banks – has risen sharply, reflecting Europe’s debt tremors.

For consumers, in turn, the spike adversely affects a variety of loans in this country, not least of all home mortgages; the index is the primary benchmark used to determine rates on most jumbo loans now issued, and it underlies many of the subprime loans issued during the boom. Libor’s fluctuations also determine the monthly rates on many commercial loans here.

With the U.S. economy showing signs of a fledgling recovery, some now question whether it makes sense to enmesh the loan rates of U.S. homeowners and small businesses with the ill health of European financial institutions and governments.

G8 meeting in Haliburton Ontario, followed buy G20 meeting in Toronto, Ontario. Original security cost, $179 million. Revised estimate one month from meetings $870 million and climbing. Cost of a sense of security for worlds fat cats. Priceless.

Fair disclaimer: I have no idea of the source of the following story, nor do I have any way to verify its accuracy.

New Law Forces CEOs To Humbly Shrug Before Receiving Massive Bonuses

“Securities and Exchange Commission officials are calling it the
strictest regulatory reform since the Great Depression: CEOs of major
financial institutions will now be required to humbly shrug and smile
sheepishly before accepting huge salary bonuses.

The new regulation, SEC rule 206(b)-7, will reportedly target Wall
Street executives who accept disgustingly bloated annual payouts,
forcing them to raise and then lower their shoulders in a manner that
conveys a mild degree of humility or a sense of “Aw, shucks. Who? Me?”

“This sweeping new reform sends a clear message to fat-cat CEOs at
firms like Goldman Sachs and AIG,” SEC chair Mary Schapiro said
Monday. “Never again will they be able to receive massive bonuses
unless, at a minimum, they flash a gee-I-don’t-think-I-should
expression and say something like ‘Well, all right, but only if you
insist’ first.”

“Mark my words,” she continued, “The days of greedy, out-of-touch
executives pocketing outrageous $40 million bonuses without acting
slightly embarrassed about it are over.”

The crackdown comes on the heels of Wall Street’s 2010 bonus
season, during which not one executive was observed to look at the
floor meekly, sink his hands into his pockets, or dig his right toe
awkwardly into the ground before taking his cut of the estimated $55
billion in payouts.”

Forget the D-word. We are in a “Compression”. You know, a Communist-biased recession where economic activity shrinks as the government grows to consume everything in its path. How does it feel to be compressed?

SBA out of money for loan breaks
Washington Business Journal

The Small Business Administration once again has run out of money for breaks that made its loans less risky for lenders and more affordable for borrowers.

The economic stimulus bill temporarily increased the government guarantee to 90 percent on the SBA’s flagship 7(a) loans and reduced or eliminated fees on 7(a) and 504 loans, which primarily are used for real estate. Congress has extended these enhancements four times, but the SBA announced Wednesday that it has exhausted all of the funds provided in the most recent extension.

As a result, the agency has reactivated its waiting list for borrowers who want to receive the higher guarantee and reduced fees when — and if — Congress provides funds for another extension. Pending legislation would extend these breaks through the end of the year, but it is not clear whether this bill will be enacted before Congress leaves for its weeklong Memorial Day break.

Warning: Crash Dead Ahead. Sell. Get Liquid. Now.
Paul B. Farrell MarketWatch

A bigger meltdown than the credit crisis? Yes, Bush’s team drove America into a ditch. But now Obama and his money men, Summers, Geithner, Bernanke, are digging the hole deeper. Soros says we have not learned “the lessons that markets are inherently unstable.” As a result, “the success in bailing out the system on the previous occasion led to a super-bubble.” Now “we are facing a yet larger bubble.” Worse than 2008?

Yes, the game may be “in the refrigerator,” the lights will go out, but as Soros hints, the electricity may get turned off too. Get it? This may not be a correction. Not even a bear. What’s coming could be worse than the 2000 dot-com crash and the 2008 meltdown combined, a “Super-Bubble” says Soros. And the biggest reason, Nouriel Roubini and Stephen Mihm tell Newsweek, is that “the president’s half-measures won’t fix our failed financial system” because he refuses to “bust up the too-big-to-fail banks.”

Yes, Congress will pass something. But unfortunately, as reported on MSNBC, Senator Dodd, the reform bill’s sponsor, is a turncoat, working overtime with Wall Street lobbyists “to weaken financial reform,” leave us vulnerable to a new, bigger crash in the near future.

How bad is your bookie’s point spread in this game? A blowout? Will the Dow drop below 9,000 again? Now that it’s broken technical supports, will it drop below 6,470, where the last bull rally started in early 2009? Can you handle the nerve-racking volatility generated by Wall Street’s high-frequency traders playing the game at warp-speed with algorithms making thousands of micro-bets in milliseconds, betting billions daily?

A new “mini” stimulus is on the way… Pump baby, Pump!

“Washington is now calling for another stimulus. Larry Summers, senior economic adviser to President Obama, has asked Congress to begin drafting a new stimulus bill in an attempt to prevent a “double dip recession”. The proposed size of this new stimulus is so far only $200 billion, much smaller than the last $787 billion stimulus bill. However, we are sure Congress will increase the size of it, especially if stocks continue their nominal decline. The new stimulus bill will likely coincide with trillions of dollars in additional quantitative easing by the Federal Reserve”.

Obama’s border plan looks similar to Bush’s.
Associated Press Wed May 26

PHOENIX – President Barack Obama’s plan to send as many as 1,200 National Guard troops to the US-Mexico border appears to be a scaled-down version of the border security approach championed by his predecessor.

The 6,000 troops who were sent by President George W. Bush to the border from June 2006 to July 2008 were generally credited within law enforcement circles as having helped improve border security, but restrictions placed on the soldiers were denounced by advocates for tougher enforcement who are now leveling similar objections at Obama’s plan.

AP Exclusive: Witness says BP took ’shortcuts’

COVINGTON, La. (AP) — Senior managers complained oil giant BP was “taking shortcuts” by replacing heavy drilling fluid with saltwater in the well that blew out, triggering the massive oil spill in the Gulf of Mexico, according to witness statements obtained by The Associated Press.

Truitt Crawford, a roustabout for drilling rig owner Transocean Ltd., told Coast Guard investigators about the complaints. The seawater, which would have provided less weight to contain surging pressure from the ocean depths, was being used to prepare for dropping a final blob of cement into the well.

“I overheard upper management talking saying that BP was taking shortcuts by displacing the well with saltwater instead of mud without sealing the well with cement plugs, this is why it blew out,” Crawford said in his statement.

A spokesman for BP, which was leasing the rig Deepwater Horizon when it exploded April 20, killing 11 workers and triggering a massive oil spill in the Gulf of Mexico, declined to comment.

At least the U.S. stock market has righted itself.

Updated Wednesday, May 26, 2010 10:26 am TWN, Bloomberg and The Korea Herald Asia News Network

Stocks plunge in Europe and Asia

Asian stocks plundged as European stocks tumbled to an eight-month low and U.S. index futures dropped as signs of weakness in the Spanish banking system increased concern that Europe’s debt crisis is spreading and tensions grew in the Korean peninsular.

Banco Santander SA and Societe Generale SA slid more than 5 percent, leading a gauge of bank shares to the lowest level since July, as Spanish regulators pushed four lenders into merging and the interbank lending rate climbed for an 11th day. BHP Billiton Ltd. and Total SA led commodity producers lower as base metals retreated and crude oil fell below US$68 a barrel.

The benchmark Stoxx Europe 600 Index sank 2.9 percent to 231.04 at 2:26 p.m. in London, heading for the lowest close since September. All 18 western European markets and all 19 industry groups in the Stoxx 600 declined after a report that North Korean leader Kim Jong Il last week ordered his military to prepare for combat.

“If your daily investment strategy horizon is 24 to 48 hours then it’s dangerous,” Nick Nelson, London-based head of European equity strategy at UBS AG, said in a Bloomberg Television interview. “The North Korea and South Korea situation — we have had these concerns before, but the market is now very risk-averse so we are focusing on those issues more than we would normally.”
…

Updated Saturday, May 22, 2010 0:23 am TWN, By Katrina Nicholas, Bloomberg

Interbank rates in Asia soar on EU credit concerns

The rates banks say they pay for three-month loans are rising in Asia on concern Europe won’t be able to contain its debt crisis.

The three-month Singapore interbank offered rate, or Sibor, rose to 0.49583 percent Friday, the highest since July 30, according to the city state’s Association of Banks. Rates in Malaysia are at the most in 16 months and reached a one-month high in South Korea.

“This is a reflection of apprehension about credit risk in the banking sector,” Martin Hohensee, Singapore-based head of Asia fixed-income research at Deutsche Bank AG, said in a phone interview.
…

NYers wage jihad vs. WTC mosque
NY Post

Angry relatives of 9/11 victims last night clashed with supporters of a planned mosque near Ground Zero at a raucous community-board hearing in Manhattan.

After four hours of public debate, members of Community Board 1 finally voted 29-1 in support of the project. Nine members abstained, arguing that they wanted to table the issue and vote at a later date.

The board has no official say over whether the estimated $100 million mosque and community center gets built. But the panel’s support, or lack of it, is considered important in influencing public opinion.

HOLY WAR: A protester last night interrupts a Community Board 1 meeting, where the proposed site for a mosque two blocks from Ground Zero won overwhelming support, in a 29-1 vote.

Holding up photos of loved ones killed in the Twin Towers and carrying signs such as, “Honor 3,000, 9/11 — No mosque!” opponents of the proposed Cordoba House on Park Place called the plan an insult to the terror-attack victims.

“That is a burial ground,” said retired FDNY Deputy Chief Al Santora, referring to the fact that victims’ remains were scattered for blocks.

Santora’s 23-year-old son, Christopher, was the youngest firefighter to die that day.

The RI PTB just need to tax the crap out of it’s citizenry across the board, problem solved.

Wait grows longer for R.I. tax refunds.
Journal Staff Writer

PROVIDENCE — Thousands of Rhode Island income-tax refunds are being delayed longer than previously reported because of state cash-flow problems.

Overall, the state has delayed payment of about 53,000 individual income-tax refunds — totaling about $36.3 million — to make sure it has enough money to pay off state borrowings that come due in June, said Paul L. Dion, chief of the state Office of Revenue Analysis.

When the issue first arose earlier this month, state officials said they were delaying payment of refunds by about three weeks after the returns were processed. As of Tuesday, however, the delay had grown to between four and six weeks, state officials acknowledged.

Sestak White House scandal called ‘impeachable offense’
‘It’s Valerie Plame, only bigger, a high crime and misdemeanor’

Joe Sestak Back On Hill After Defeating Spector In PA Primary

If a Democratic member of Congress is to be believed, there’s someone in the Obama administration who has committed a crime – and if the president knew about it, analysts say it could be grounds for impeachment.

“This scandal could be enormous,” said Dick Morris, a former White House adviser to President Bill Clinton, on the Fox News Sean Hannity show last night. “It’s Valerie Plame only 10 times bigger, because it’s illegal and Joe Sestak is either lying or the White House committed a crime.

“Obviously, the offer of a significant job in the White House could not be made unless it was by Rahm Emanuel or cleared with Rahm Emanuel,” he said. If the job offer was high enough that it also had Obama’s apppoval, “that is a high crime and misdemeanor.”

“In other words, an impeachable offense?” Hannity asked.

“Absolutely,” said Morris.

The controversy revolves around an oft-repeated statement by Rep. Sestak, D-Pa., that he had been offered a job by the Obama administration in exchange for dropping out of the senatorial primary against Obama supporter Sen. Arlen Specter.

I’m overdosing on schadenfreude today…….Sorry, but I must share…..

Got a call yesterday, from an aircraft sales guy. Seems that my former employer is in the process of selling the airplane. During the “Pre-purchase Survey”, it seems that they lost or cannot find any evidence/log entries that the aircraft engines were run on a regular basis while the aircraft was in storage. So they need to find the books, or find someone who ran the airplane, and will sign the logbooks to that effect.

If they cannot document it, they are looking at about $200,000+ worth of mandatory engine inspection work, plus fixing anything they find during the inspection. And because they did not “maintain the engine in accordance with the Approved Maintenance Manual”, their warranty coverage is void.

Sucks to be them.

Told the guy that I wasn’t feeling too cooperative, since in my estimation, I got hosed out of about $15K. Did tell him I would vouch for the work I signed off thru mid-April 2009; all he had to do was find the books I left in the office last July. This may, or may not, matter, since the airplane sat totally unattended (as far as I know) from August thru April

Tried to tell them. But what do I know? I’m just a dumb-azz wrench turner.

Chained to a lamp post, the terrified Chinese boy whose poverty-stricken father tried to sell him on the street.

A father staged a modern-day slave auction after chaining his son to a lamppost and taking bids from strangers to take the terrified eight-year-old off his hands.

Father Yong Tsui had put up a small table with a sign on it giving the youngster’s age, name, and his capacity for hard work.

But when bidders began to ask how little he could eat, furious passers by turned on the auction and attacked Fai’s father to stop the sale in Wuhan, central China.

http://www.dailymail.co.uk/news/worldnews/article-1281541/Chinese-boy-chained-lamp-post-father-tried-sell-street.html

Ruh roh - quite a dive going on in the markets. DJI down about 100 in about 15 minutes.

Soros - please change your mind!!!! Don’t do this to us!!!!

PPT needs to kick in the turbo charger.

Dominoes lined up all around the country, hold your wallet and grab your ankles.

More Cities on Brink of Bankruptcy
CNBC ~ May 26, 2010

The possibility of a bankruptcy filing by the city of Harrisburg, Pa., the state capital, looms large these days-and it could be the first in a series, say some Wall Street traders.

Harrisburg, population 55,000, owes nearly $70 million in debt payments this year, and it’s unclear where that money will come from. Harrisburg now has one of the lowest credit ratings of any municipality in the United States.

Harrisburg Mayor Linda Thompson told CNBC Wednesday that she had assembled a group of bond stakeholders, the city council and other interested parties to work out the crisis “so that we don’t become the poster child of the world in terms of bankruptcy.”

Municipal bond underwriters are monitoring Harrisburg, which has struggled to contain the costs of financing a troubled incinerator project.

In 2003, the city borrowed $125 million to expand and retrofit its incinerator, which officials thought would make money for Harrisburg. The incinerator re-opened five years later, but it’s turned out to be nothing but a money drain.

On May 1, the city missed a $452,282 loan payment related to the incinerator.

Raising taxes or selling assets, like real estate or parking lots, are options for Harrisburg. So is a restructuring plan-either inside or outside of bankruptcy.

“You down with PPT? Yeah, you know me! You down with PPT? Yeah, you know me! You down with PPT? Yeah, you know me! Who’s down with PPT? Every last Crony!!!”

Good for this guy, one less puke on the streets and no taxpayer funded trial or prison time to cover.

80-Year-Old Chicago Man Kills Armed Home Invader
FOXNews.com

An 80-year-old Chicago man shot and killed an armed assailant who broke into his two-story house in a predawn home invasion Wednesday on the city’s West Side.

At about 5:20 a.m., the homeowner and his wife, also in her 80s, discovered the intruder entering their home through a back door. The homeowner, who had a gun, confronted and killed the burglar on the doorstep, police said. Cops said the intruder also fired his gun during the struggle.

“It’s a good thing they had a gun, or they might be dead,” said Curtis Thompson, who lives next door to the couple, the Chicago Sun-Times reported.

Neighbors described the elderly couple, who both walk with canes, as pillars of the community in Garfield Park, where home invasions have been all too frequent.

Their neighbor, Shaquite Johnson, told MyFoxChicago that the two are “heroes” for fighting off the attacker — and that the shooting means there is “one less criminal” walking the streets.
“They don’t bother no one, so why would anyone do that to them?” she said.

PPT went for a few cocktails before the close, they’ll be bright eyed and bushy tailed tomorrow.

They just want S n P above key support level of 1065. Mission accomplished.

Boycotts are BS, BP will recover down the road, like it or not. I noticed Jesse “the king of the race pimps” Jackson had about 10 people marching with him in front of a BP station yesterday. What these morons can’t grasp is that the independent franchise owner didn’t do a damn thing wrong. Just offering a service, trying to make a buck and feed his/her family.

Boycott BP movement ~ May 26, 2010

NEW YORK (CNN) — An online movement to boycott BP for its role in the Gulf of Mexico oil spill is growing at a rate of better than 25,000 names a day.

“I won’t buy their gas any more. I won’t patronize a company that’s destroying our planet,” New Jersey resident Patricia Jarozynski told CNN, one of 118,000 fans of the “Boycott BP” Facebook page as of this writing.

Anger is growing along with the size of the spill in the Gulf of Mexico. BP’s environmental catastrophe has Public Citizen, the consumer advocacy group, also calling for a boycott against the oil giant, the first time it’s taking such action against an energy company.

“The boycott sends a clear message that we as American consumers are not going to tolerate corporate illegal activity,” said Tyson Slocum, director of Public Citizen’s Energy Program. “We’re not going to tolerate a company that has a clear demonstrated track record of willful negligence.”

The Financial Times
The grasshoppers and the ants – a modern fable
By Martin Wolf
Published: May 25 2010 20:33 | Last updated: May 25 2010 20:33

Everybody in the west knows the fable of the grasshopper and the ant. The grasshopper is lazy and sings away the summer, while the ant piles up stores for the winter. When the cold weather comes, the grasshopper begs the ant for food. The ant refuses and the grasshopper starves. The moral of this story? Idleness brings want.

Yet life is more complex than in Aesop’s fable. Today, the ants are Germans, Chinese and Japanese, while the grasshoppers are American, British, Greek, Irish and Spanish. Ants produce enticing goods grasshoppers want to buy. The latter ask whether the former want something in return. “No,” reply the ants. “You do not have anything we want, except, maybe, a spot by the sea. We will lend you the money. That way, you enjoy our goods and we accumulate stores.”

Ants and grasshoppers are happy. Being frugal and cautious, the ants deposit their surplus earnings in supposedly safe banks, which relend to grasshoppers. The latter, in turn, no longer need to make goods, since ants supply them so cheaply. But ants do not sell them houses, shopping malls or offices. So grasshoppers make these, instead. They even ask ants to come and do the work. Grasshoppers find that with all the money flowing in, the price of land rises. So they borrow more, build more and spend more.

The ants look at the prosperity of grasshopper colonies and tell their bankers: “Lend even more to grasshoppers, since we ants do not want to borrow.” Ants are far better at making real products than at assessing financial ones. So grasshoppers discover clever ways of packaging their grasshopper loans into enticing assets for ant banks.
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I can’t tell whether or not this fable has a happy ending?

The grasshoppers and the ants – a modern fable
By Martin Wolf

Published: May 25 2010 20:33 | Last updated: May 25 2010 20:33
…
When the crash comes to America and households stop borrowing and spending and the fiscal deficit explodes, the government does not say to itself: “This is dangerous; we must cut back spending.” Instead, it says: “We must spend even more, to keep the economy humming.” So the fiscal deficit becomes enormous.

This makes the Asians nervous. So the leader of China’s nest tells America: “We, your creditors, insist you stop borrowing, just as European grasshoppers are now doing.” The leader of the American colony laughs: “We did not ask you to lend us this money. In fact, we told you it was a folly. We are going to make sure American grasshoppers have jobs. If you do not want to lend us money, raise the price of your currency. Then we will make what we used to buy and you will no longer have to lend to us.” So America teaches creditors a lesson from a dead sage: “If you owe your bank $100, you have a problem; but if you owe $100m, it does.”

The Chinese leader does not want to admit that his nest’s huge pile of American debt is not going to be worth what it cost. Chinese people also want to go on making cheap goods for foreigners. So China decides to buy yet more American debt, after all. But, decades later, the Chinese finally say to the Americans: “Now we would like you to provide us with goods in return for your debt to us. Thereupon, the American grasshoppers laugh and promptly reduce the debt’s value. The ants lose the value off their savings and some of them then starve to death.

What is the moral of this fable? If you want to accumulate enduring wealth, do not lend to grasshoppers.

Frankendodd’s Financial Reform

Wednesday, May 26, 2010
By Glenn Beck

We’ve got another major reform about to get jammed down our throats! Are you excited? It’s the financial reform bill, because those greedy Wall Street fat cats need to be stopped. And this will stop them, because Barney Frank is putting the final touches on this bill.

I have complete confidence that Chris Dodd and Barney Frank have finally ensured there will never be a recession ever again. The Frakendodd monster is at it again and they’re throwing our children in a well.

They’ve got a great track record, especially when it comes to knowing what’s wrong with the financial sector. Remember when Dodd said: “Fannie and Freddie are very, very liquid; they’re in good shape, in my view.”
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Olygal certainly would have appreciated this story!

May. 26 2010 - 4:31 pm

Dow finishes below 10,000 as Greece is swarmed by plague of frogs
By MICHAEL ROSTON

So perhaps you heard the news that the Dow Jones Industrial Average just closed for the day below 10,000 points. The market’s been flirting with that psychological break since last week, but it didn’t happened until today.

Bloomberg News is chalking it up to spreading panic from the Greek bailout and downgrades of debt in other European countries. But while everyone is freaking out about the Euro, they should be looking at closer signs of the impending apocalypse. It’s not just the daily protests in Greece over cutting the country’s overstuffed budget. It’s the plague of frogs that descended on a part of the country today:
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test

Yep, I’d say the cat has officially stopped wiggling.

Here’s a business idea:

The IRS has expanded its whistle-blower program:

http://www.irs.gov/compliance/article/0,,id=180171,00.html

I’m wondering if you can make money finding mortgage scamsters just by careful scrutiny of public records. (For example, someone who’s been renting out a house, but mortgage is for a primary residence, and person is taking advantage of forgiven debt tax forgiveness)….

“US money supply plunges at 1930s pace as Obama eyes fresh stimulus”

The M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal blitz in history.

http://www.telegraph.co.uk/finance/economics/7769126/US-money-supply-plunges-at-1930s-pace-as-Obama-eyes-fresh-stimulus.html

I like this development. I wish the Wall Street Megabanks would cannibalize each other like the Donner party, until they are mutually shrunk down to efficient scale.

* The Wall Street Journal
* LAW
* MAY 27, 2010

Lehman’s Bankruptcy Estate Sues J.P. Morgan

By MIKE SPECTOR And SUSANNE CRAIG

Lehman Brothers Holdings Inc.’s estate sued J.P. Morgan Chase & Co., alleging J.P. Morgan illegally siphoned billions of dollars from Lehman in the days before the troubled investment bank filed for the largest bankruptcy in U.S. history.

The lawsuit alleges that J.P. Morgan Chief Executive James Dimon and other top executives used inside knowledge to take advantage of Lehman as its financial state worsened. J.P. Morgan, the suit alleged, coerced Lehman to turn over $8.6 billion in collateral in September 2008, triggering a liquidity squeeze that contributed to Lehman’s collapse. The estate is hoping to recoup billions in collateral the bank demanded, and billions in other damages.

J.P. Morgan spokesman Joe Evangelisti said the lawsuit “is ill-conceived and meritless, and we will vigorously defend it.”

The lawsuit, long expected, contains among the most-significant allegations to date about the interplay between Lehman and its onetime Wall Street brethren.

J.P. Morgan served as Lehman’s main “clearing bank,” meaning it acted as a middleman between Lehman and its lenders and investors. In this capacity, it knew more than most market players about Lehman’s financial condition, which was growing more dire in the summer and fall of 2008.

The lawsuit alleges J.P. Morgan used this advantage to squeeze billions of dollars out of Lehman by demanding more collateral to cover its risks, ensuring J.P. Morgan “would stand ahead of all other [Lehman creditors]—not just for its clearance exposure, but for all possible exposure that could result from [a Lehman] bankruptcy.”
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